Monthly Problem-Driven Consumption Index
PDCI Predicts Continued Economic Stability
The Problem-Driven Consumption Index (PDCI), a leading indicator of consumer spending, slightly increased in May, measuring 167.2, up from 164.4 in April. This data suggests there will be a small increase in spending for May relative to April. The increased PDCI score stems from an increase in the amount consumers were planning to spend to solve their problems.
The PDCI is down 21% relative to May 2016, the decrease is relative to the all-time highs observed in the PDCI for this time last year. This year-over-year decrease is driven by a decrease in the amount consumers plan to spend solving problems.
The PDCI is derived from responses to the Consumer Problem Survey (CPS). The PDCI is based on two primary components: the quantity of problems consumers are seeking to solve, and the amount consumers plan to spend solving them. The CPS is a monthly survey of a nationally representative sample that measures consumers’ problems that require market solutions, thereby allowing the researchers to track the quantity of, severity of, and the types of problems that consumers experience. Data is population weighted to eliminate survey completion bias. The PDCI calculated based on the results is scaled by the CPI-U. Because problem recognition usually precedes purchases, the data from the CPS provides an unprecedented view of future consumption and spending. To learn more about the CPS, watch our video HERE.